How to Start a Buy-and-Sell Business in the Philippines


Filipinos love to shop! Shopping is an activity that knows no season in the Philippines. Traffic, bad weather, credit crunch, or tight cash flow—all these don’t matter. Filipinos always find the best bargains for their hard-earned money. That’s why it’s a good idea to start a buy-and-sell business in the Philippines.

Here are a few of the advantages of running a buy-and-sell business:

  • Low-cost business: you can run your business from home and save up on rental expense.
  • Low risk: the amount of capital you risk is equivalent to the inventory you keep. At worst, sell them at cost.
  • 24/7 business: you are not limited by operating schedules especially if your buy-and-sell business is online.
  • Wide market reach: unlike the reach of a business with a physical location, your reach is not limited by local geography.
  • Pricing advantages: since your costs are less, you can offer low-priced merchandise and still earn a good profit margin.

In the Philippines, a buy-and-sell business is a good venture to start for first-time entrepreneurs.

Simple Business Concept.

A buy-and-sell enterprise is a relatively simple concept to understand. You acquire merchandise at a certain price and sell it at a price higher than the original price for profit. The idea of buying and selling for profit is a concept that has been around for ages. The difference is that the medium of exchange has evolved from commodities to currency.

Ideal Market Conditions.

The Philippines is notorious for being one of the countries with the worst traffic conditions. Our country loses an estimated Php 2 billion a day because of decreased productivity caused by traffic. Given the ineptitude of the local government agencies tasked to solve the traffic situation, there doesn’t seem to be light at the end of the MRT tunnel.

Our weather has worsened in the past 15 years because of the effects of global warming. “Downpour” is not an accurate description of our rainy season. “Torrential” is the appropriate term. Cities can get flooded within hours of torrential rain; and what is the by-product of flooding? Yes, increasingly heavy traffic!

“Best Bargain Culture.”

In the Philippines, there is no shame in buying bargain basement products. I remember a few Christmas seasons ago, one of my friends came home from Canada. She gave me a beautiful Armani shirt as a gift. I was a bit surprised when she said, “That is genuine Armani! I got it from a real Armani store.”

Personally, I didn’t care. The shirt was nice and fit well. It wouldn’t have mattered if it came from a thrift store. Besides, it’s the thought that counts!

Even celebrities, such as Anne Curtis and Solenn Heussaff, are known to patronize bargain stores. Curtis even has a show on cable television called F Word Out Loud with Anne Curtis, which chronicles her discoveries of the best bargains in the Philippines from food to clothes.

During Christmas, the most patronized retail stores are the “tiangges” or market stalls in Greenhills and the “ukay ukay” or second-hand stores in Baguio City.

Expensive Retail Store Prices.

A few years ago, I saw a friend of mine in the gym wearing a Nike Dry Fit shirt. It looked nice and expensive.

According to my friend, it cost him Php 3,500. A few minutes later, the gym trainer walks in wearing the same shirt. Both men removed their shirts to see how identical they were. Even the tags were the same!

I asked the gym trainer where he bought his shirt and for how much, “Php 650, from my friend who distributes online.” My friend with the Php 3,500-worth shirt just heard the sound of Php 2,850 flushing down the toilet.

It’s expensive to buy merchandise from the retail stores because their overhead is so high. They have to pass on to the customer the cost of rent, salaries, benefits, and power, among others.

So if you want to dip your feet in the ocean of entrepreneurship, a buy-and-sell business is a good venture to start. Here’s how you can set up your buy-and-sell business in the Philippines:

1. Find a Product or Service to Sell

The best thing about a buy-and-sell business is also its own worst enemy.

The industry is so vast and popular that there are many proprietors in the industry. Almost everything you want to sell may already be the product bailiwick of another retailer.

Unless you had an “aha” moment, here are a few tips on finding a product or service to sell:

  • Conduct a Keyword Research. Look for products or niches online that are popularly patronized by Internet users based on keyword research opportunities.
  • Introduce a New, Interesting, and Innovative Concept. One of the most interesting ideas I’ve seen is “Loudbasstard,” which is an iPod and MP3 player amplifier/speaker that is made of choice bamboo. It is a sustainable idea that caters to the personal entertainment market.
  • Solve a Customer Pain Point. Identify a common problem area for the market and source for products that can solve it. For example, people spend too much time sitting down, thereby causing compression forces on the lower back, which over time can cause chronic lower back pain. Look for a product that relieves spinal compression or supports the lumbar area.

2. Prepare a Business Plan

Once you have identified a product or service to sell, it’s time to prepare a business plan.

The business plan is the reference point for the buy-and-sell enterprise. Everything that needs to get done, including schedules, is in the business plan.

In addition, the business plan is a valuable document to have if you need to secure funding. Banks, venture capitalists, investors, incubators, and accelerators all want to go through your business plan to learn your business and to see if it is viable.

3. Come Up with a Cool-Sounding Trade Name

If your business plan paints a rosy picture of your buy-and-sell business, you should now find a cool-sounding trade name for an easy and fast recall.

Whenever you hear the product Speculoos Cookie Butter, I’m sure that the first name that comes to mind is Trader Joe’s, which popularized the fattening but insanely delicious bread spread.

There are only two things to keep in mind when coming up with a trade name. First, it must be related to your business. Second, keep it short but descriptive.

4. Register Your Business

Even if you plan to run your business online from home, you must register your business. Doing so legalizes services; manufacturers and distributors are averse to do business with entities that are not registered in their country of origin.

Part of the process of landing distribution or supply contracts is to submit business papers. This includes your business registration and tax registration papers. Without these, you’ll be hard-pressed to look for suppliers who are willing to work with you.

If you are setting up a sole proprietorship, you can register at the Department of Trade and Industry or DTI. If you decided to have a corporation or partnership, you have to register with the Securities and Exchange Commission or SEC. The good news is that you can register your business online with either of these agencies.

If you are running an e-Commerce business from home, check with your village if its by-laws allow residents to house businesses in their residence. If not, you’ll have to lease at least a receiving office. A business address is needed when filing your business papers. The cost of a receiving office averages Php 1,500 per month.

5. Procure Your Business Permits

Once you get your business registration papers out, you should move to get your business permits.

As mentioned, suppliers will require this when you apply to be a part of their distribution channel. Suppliers place special importance on your business registration and tax registration papers.

The receiving office will also need a copy of your business registration papers, barangay clearance, mayor’s permit, and tax certification. These documents are posted at the receiving office for government inspectors to see.

Related: 5 Essential Business Permits and Licenses in the Philippines

6. Set Up an e-Commerce Website

The website is your online business hub. Whether you decide to run a physical location or an online model for your buy-and-sell business, you must have an e-commerce website. Your website must have the following characteristics:

  • Mobile-friendly
  • Fast download speed
  • Accessible by multi browsers
  • Fully functional e-commerce buttons and features
  • Simple but effective design

With these in mind, hire a professional website designer. Building an e-commerce website is more extensive and complicated than the usual website.

You have to make sure that the features for payment, zooming, customer sign up, and page loading work well. Remember, you have to open a merchant account with your bank so you can accept payments through facilities like PayPal, debit cards, or credit cards. These details have to be integrated into your e-commerce ordering page.

If your buy-and-sell business positions you as a middle man, such as for real estate or used cars, make sure you have an interactive website and that the listings are regularly updated.

7. Source Suppliers

The biggest challenge that confronts buy-and-sell proprietors is finding suppliers. If you are catering to a localized market, the process is comparatively easy. You can visit markets, trade shows, and expositions that feature various product suppliers.

If you want to set up a real estate buy-and-sell business, you have to build your listing. Doing so requires a great deal of networking plus a CRM database to keep track of your leads, prospects, clients, and account status.

However, if you want to be a distributor or supplier of imported products you have to supply credible suppliers who can offer you prices that won’t affect your margins.

The best approach is to meet with the manufacturer directly. If you qualify, he/she will refer you to their authorized distributors. Even if you are referred by the manufacturer, you still have to qualify with the distributors. As mentioned, your business papers will come in handy in these transactions.

8. Create Your Value Chain

Now that you have your suppliers, it’s time to shore up your value chain.

The first question is, how will you deliver the products to your customers? If you deal with the local market, you can stock up on inventory. Another option is drop shipping, where delivery is taken care of by the supplier. This option saves you storage costs. However, the margins via drop shipping are low.

The second question is, who will help you run the business? As the business owner, you cannot be tied down to manage even the nonessential tasks. Your options include a virtual assistant you hired, a family member, or a friend.

The third question is, will you have customer support? This is a great added value and is a key differentiator with your competitors. However, it would depend on the scale of operations. If the scale has grown to a point that the volume of orders and inquiries have increased exponentially, then you should consider getting customer support.

9. Network and Promote Your Services

Once you have set up your website, you should also open social media accounts to support your buy-and-sell venture.

Here are a few tips on using social media for your business:

  • Your content must not be 100% business. Include relevant contents, such as articles that give valuable tips to shopping online or interesting blogs on the latest trends.
  • Always respond to your followers. Any comment opens an opportunity for engagement, and this is how you build relationships with your customers. Make it a point to respond within 24 hours.
  • Use only relevant social media. Believe it or not, not all social media have a value for your business. Keep in mind that each community has its own culture with its own set of nuances.
  • Be active! To enhance your online presence, you must be on social media every day.

You can also go old school and market your products and services through trade shows, expos, night markets, and other similar events.

Related: 8 Creative Marketing Tips to Make Your Business Stand Out

10. Audit Your Performance

The biggest mistake entrepreneurs make is their failure to audit their performance. An audit is important to assess the profitability of your business. Here’s a checklist of what needs to be done in an audit:

  • Online analytics. This how you measure your efforts in building your business online. It can give you information on the typical persona of your buyer, their online behavioral traits, where they are coming from, what mode of payment they use, and which products get the most views.
  • Financial analysis. Hire the services of an accountant to assess the feasibility of your business. A financial analysis can show you which items have the best and worst margins. It can give you an idea if your ratio of unpaid receivables are rising or negligible. Finally, it can help determine the strong and weak points of your business.

It may seem that setting up a buy-and-sell business takes time. The truth is, it does take time, but the effort is well worth it. There are not too many business opportunities whereby your risks are low and your potential rewards are high. The Internet and the social media have definitely made it easy to find success in the buy-and-sell business.

Starting a buy-and-sell business in the Philippines is a good first step to becoming a seasoned retailer.

Who knows? Maybe you will become the next Henry Sy, John Gokongwei Jr., or John W. Nordstrom!

You Might Also Like